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82–185 2015

H.R. lll, THE GLOBAL INVESTMENT IN 

AMERICAN JOBS ACT OF 2013 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 18, 2013 

Serial No. 113–32 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

(III) 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

LEE TERRY, Nebraska 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVE B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

JOE BARTON, Texas 

FRED UPTON, Michigan, ex officio 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

G.K. BUTTERFIELD, North Carolina 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

BOBBY L. RUSH, Illinois 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

DONNA M. CHRISTENSEN, Virgin Islands 

HENRY A. WAXMAN, California, ex officio 

(V) 

C O N T E N T S 

Page 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 12 

WITNESSES

Francisco J. Sanchez, Undersecretary of Commerce for International Trade, 

United States Department of Commerce ........................................................... 13 

Prepared statement .......................................................................................... 15 

Answers to submitted questions * .................................................................... 110 

Nancy L. McLernon, President and CEO, Organization for International Investment ................................................................................................................ 37 

Prepared statement .......................................................................................... 40 

Linda Dempsey, Vice President, International Economic Affairs, National Association of Manufacturers .................................................................................. 49 

Prepared statement .......................................................................................... 51 

Matthew J. Slaughter, Associate Dean for Faculty, Tuck School of Business, 

Dartmouth University ......................................................................................... 62 

Prepared statement .......................................................................................... 64 

Answers to submitted questions ...................................................................... 111 

Martin Baily, Senior Fellow, Economic Studies, Bernard L. Schwartz Chair 

in Economic Policy Development, Brookings Institute ..................................... 69 

Prepared statement .......................................................................................... 72 

Answers to submitted questions ...................................................................... 113 

Celeste Drake, Trade and Globalization Policy Specialist, AFL-CIO .................. 81 

Prepared statement .......................................................................................... 83 

Answers to submitted questions ...................................................................... 115 

* Mr. Sanchez did not respond to submitted questions. 

SUBMITTED MATERIAL

Discussion draft ....................................................................................................... 4 

(1) 

H.R. ————, THE GLOBAL INVESTMENT IN 

AMERICAN JOBS ACT OF 2013 

THURSDAY, APRIL 18, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:33 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Lee Terry (chairman of the subcommittee) presiding. 

Members present: Representatives Terry, Lance, McKinley, 

Pompeo, Kinzinger, Johnson, Long, Schakowsky, McNerney, and 

Barrow. 

Staff present: Charlotte Baker, Press Secretary; Kirby Howard, 

Legislative Clerk; Nick Magallanes, Policy Coordinator, CMT; 

Brian McCullough, Senior Professional Staff Member, CMT; Andrew Powaleny, Deputy Press Secretary; Shannon Weinberg Taylor, Counsel, CMT; Michelle Ash, Democratic Chief Counsel; Jacqueline Cohen, Democratic Senior Counsel; and Will Wallace, 

Democratic Policy Analyst. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. So welcome, everybody. Good morning to our panelists and guests. The purpose of today’s hearing is to highlight the 

importance of foreign direct investment in the United States and 

learn more from our experts on how lowering barriers to foreign investment in our country can have significant benefits for our economy as a whole. I hate to steal the undersecretary’s thunder, but 

his testimony lays out some of the facts that deserve being mentioned more than once. 

In 2010 U.S. affiliates of foreign firms employed over 5.3 million 

workers—as I understand, that is now 5.6 as of today—and the average salaries are 77,000 per year. These firms accounted for 41.3 

billion worth of research and development efforts and 149 billion 

worth of capital expenditures in that same year. In the manufacturing sector alone, FDI inflows were nearly 84 billion in 2012, according to the National Association of Manufacturers. 

These statistics tell us a clear story: increasing capital in the 

form of direct foreign investment has positive effects on manufacturing, increased exports, job creation, and U.S. competitiveness. It 

is just that simple. 

2 

Unfortunately, these rosy statistics fail to tell the whole story. 

Foreign direct investment in the United States has fallen drastically over the last few years, relative to other nations. According 

to the testimony we will here today from the organization for international investment, the U.S. share of foreign direct investment 

has dropped from 41 percent in ’99 to 17 percent in 2011. 

The reality is that, while the U.S. remains an economic leader, 

the other nations are catching up. The statistic I just mentioned is 

indicative of that. Companies want to manufacture in a country 

where there is fair corporate tax code, a high degree of regulatory 

certainty, and a set of policies that welcome investments into the 

country. 

The United States can’t rest on its laurels. We need to take a 

hard look at some of our national policies and assess whether they 

are stunting our ability to attract companies to the U.S. that have 

proven they create jobs and will help grow our economy. The legislation that we will be introducing in the following days, the Global 

Investment in American Jobs Act of 2013, is just the first step in 

that process. 

Given what we will learn in today’s hearing from a panel of experts—and we have heard in our last three meetings focused on 

manufacturing that this should be a no-brainer. Investing in American jobs is not a partisan issue when companies like Toyota and 

Honda choose to open up manufacturing facilities in Kentucky or 

Texas or Tennessee or Ohio or South Carolina or Georgia. Notice 

Nebraska wasn’t on there. Neither was Illinois, so there is room for 

improvement. 

Ms. SCHAKOWSKY. Yes. 

Mr. TERRY. We heard from some of our executives just last week 

that when they opened the doors, thousands of jobs were created 

directly and indirectly. Local, state, and federal tax revenues went 

up not because marginal rates went up but because the economies 

in those cities and States grew and more people are working. We 

heard from these companies and how they helped change the communities they became part of, contributing through outreach programs like workforce training and charitable giving. 

If our legislation, the Global Investment in American Jobs Act of 

2013, can succeed in highlighting what the U.S. needs to do to and 

attract more of our great companies to our shores, then it is a winwin for every American and workers. 

The U.S. can still be one of the most much attractive places in 

the world to invest capital. We have a large and affluent consumer 

base, a strong rule of law when it comes to intellectual property, 

and one of the best and most productive workforces in the world. 

It is my hope that today’s hearing can help us highlight some areas 

where barriers on foreign direct investment currently exist so that 

we can build upon the positives I just mentioned and not only compete for but win the opportunities for foreign direct investment. 

I want to thank all of our panelists for coming here today and 

especially Mr. Sanchez. Thank you for being here as well. You are 

a key part of this effort and have done well. 

[The prepared statement of Mr. Terry follows:] 

3 

PREPARED STATEMENT OF HON. LEE TERRY

Good Morning and welcome to our panelists and other guests.The purpose of today’s hearing is to highlight the importance of Foreign Direct Investment in the 

United States, and learn more from the experts on how lowering barriers to foreign 

investment in our country can have significant benefits for the economy as a whole. 

I hate to steal Under Secretary Sanchez’s thunder-but his testimony lays out some 

facts that deserve being mentioned twice. In 2010—U.S. affiliates of foreign firms 

employed over 5.3 million workers making an average of $77,000 per year. These 

firms accounted for $41.3 billion worth of Research and Development efforts and 

$149 billion worth of capital expenditures that same year. In the manufacturing sector alone, FDI inflows were nearly $84 billion in 2012, according to the National 

Association of Manufacturers. 

These statistics tell a clear story: increasing capital in the form of direct foreign 

investment has positive effects on manufacturing, increased exports, job creation 

and U.S. competitiveness. It is just that simple. 

Unfortunately, these rosy statistics fail to tell the whole story. Foreign direct investment in the United States has fallen drastically, relative to other nations. According to testimony we will hear today from the Organization for International Investment, the U.S. share of foreign direct investment has dropped from 41% in 1999 

to 17% in 2011. 

The reality is that, while the U.S. remains an economic leader, other nations are 

beginning to catch up. The statistic I just mentioned is indicative of that. Companies 

want to manufacture in a country where there is a fair corporate tax code, a high 

degree of regulatory certainty and a set of policies that welcome investments into 

the economy. 

The United States cannot rest on its laurels. We need to take a hard look at some 

of our national policies and assess whether they are stunting our ability to attract 

companies to the U.S. that have proven they create jobs and help grow our economy. 

The legislation that I will be introducing in the following days, the Global Investment in American Jobs Act of 2013, is the first step in this process. 

I hope that every member of this subcommittee, on both sides, will be willing to 

cosponsor this legislation. Given what we will learn in today’s hearing from our panels of experts and what we have heard in our last three hearings focused on manufacturing, it should be a ‘‘no-brainer.’’ 

Investing in American Jobs is not a partisan issue-when companies like Toyota 

and Honda choose to open up manufacturing facilities in Tennessee and Kentucky 

and Ohio and South Carolina-we all win. We heard from some of their executives 

just last week. When they opened their doors, thousands of jobs were created, directly and indirectly. Local, state and federal tax revenues went up—not because 

marginal rates went up—but because the economies in those cities and states grew 

and because more people were working. We heard from these companies how they 

helped change the communities they became a part of—contributing through outreach programs like workforce training and charitable giving. 

If my legislation, the Global Investment in American Jobs Act of 2013, can succeed at highlighting what the U.S. needs to do to keep attracting more great companies to our shores, then it is a win for every U.S. worker. 

The U.S. can still be one of the most attractive places in the world to invest capital. We have a large and affluent consumer base, a strong rule of law when it 

comes to intellectual property and one of the best and most productive workforces 

in the world. 

It is my hope that today’s hearing can help us highlight some areas where barriers on foreign direct investment currently exist-so that we can build upon the 

positives I just mentioned and not only compete for, but win, opportunities for more 

foreign investment. 

# # # 

[The discussion draft follows:] 

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Mr. TERRY. So I yield back the rest of my time and now recognize 

that Ranking Member, Ms. Jan Schakowsky. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. I am hoping that 

we can keep our run of bipartisan hearings and work. We have got 

a good string going so far. And I thank you for holding this hearing 

on draft legislation to attract further foreign investment in the 

United States. 

I welcome the witnesses, especially Mr. Sanchez, this morning as 

our first panelist and look forward to all of the testimony. 

In the interest of promoting good jobs and overall economic 

growth, I agree that we should consider ways to increase investment in this country, both domestic and foreign. The United States 

is the global leader in attracting foreign direct investment. There 

is more foreign direct investment in America than anywhere else, 

and we are consistently ranked as number one of the easiest places 

to do business. 

There is a strong incentive to invest in America. Our economy is 

continuing to recover from the Great Recession and we remain the 

best place on Earth to find talented, motivated employees. In order 

to access all that our country has to offer, foreign investors know 

that they will be required to meet labor, health, environmental, 

and consumer standards. Strong standards protect workers in the 

communities in which these foreign investments occur, and they 

are essential for long-term economic growth in this country. 

Our economy is built on the middle class and those who aspire 

to it, and it is imperative that our attempts to expand foreign investment strengthen rather than undermine worker protections, 

compensation, and job security. Just as the best American companies observe high labor standards, so must foreign investors understand that a well-compensated and well-protected workforce will 

drive the future growth of their corporations and our overall economy. It is imperative that foreign investors respect our local, state, 

and federal environmental protections. 

I believe that climate change is the greatest challenge we face as 

a planet and as a Nation. Reducing greenhouse gas emissions, protecting our waterways from harmful toxins and chemicals, and 

shifting toward cleaner energy sources is essential if we are to 

thrive for generations to come. Our effort to encourage foreign direct investment should align with our efforts to combat climate 

change and help us transition to a clean energy future. 

Finally, it is essential that we maintain restrictions on former 

foreign investment and industries that are critical to public safety, 

national security, and a strong domestic workforce. Those restrictions help ensure the safety of the American people and the security of American jobs. 

I have listed some of the things that I am concerned about on 

foreign investment, but I look forward to hearing from our witnesses about how we can continue to drive foreign direct investment in the United States that promotes good jobs, a clean environment, and the security of the American people. 

13 

And I want to yield the balance of my time to Mr. Barrow. 

Mr. BARROW. I thank the ranking member for her time. I appreciate it. 

I cosponsored this bill in the last Congress because it is a step 

in the right direction to grow American jobs. Every time I go home, 

I am reminded how investors overseas can spur jobs here at home 

by tapping into the infrastructure and workforce we have right 

here in America. Belgian companies like Solvay in Augusta, French 

companies like Alstom in Waynesboro, and Irish companies like 

Covidien in Augusta can invest in any country in the world. They 

are proud to invest in Georgia’s 12th District. And the families that 

work for them take just as much pride in their work. 

We have the best workers in the world and we like it when companies all over the world compete for workers in Georgia. I will 

continue supporting job-creating efforts like this, and I look forward to today’s hearing. 

With that, I yield back the balance of my time. 

Mr. TERRY. Very good. No other requests for opening statements. 

Mr. Sanchez, we will recognize you for 5 minutes. 

STATEMENT OF FRANCISCO J. SANCHEZ, UNDERSECRETARY 

OF COMMERCE FOR INTERNATIONAL TRADE, U.S. DEPARTMENT OF COMMERCE 

Mr. SANCHEZ. Chairman Terry, thank you very, very much. 

Ranking Member Schakowsky, distinguished members—is that better? 

Mr. TERRY. Yes. 

Mr. SANCHEZ. Oh, that is a lot better. Distinguished members of 

the committee, thank you very much for inviting me to speak to 

you today about the Department of Commerce’s work to attract and 

retain business investment in the United States. 

With your permission, Mr. Chairman, I will summarize my statement and submit my full testimony for the record. 

Mr. TERRY. Thank you. 

Mr. SANCHEZ. Thank you, Mr. Chairman. 

At the outset, I want to thank the committee and the members 

of the House who have introduced legislation focusing on global investment. This is a clear recognition of how important the role that 

foreign direct investment plays in strengthening our economy. Such 

an effort reinforces a very simple truth: that, as a free market 

economy, the United States encourages investment from both domestic and foreign sources and that this investment leads to economic growth and job creation. 

In 2010, which was until this morning the latest available data 

we had, U.S. subsidiaries of foreign-owned farms employed 5.3 million U.S. workers. As Chairman Terry just recognized, that number 

now is up to 5.6 million. And what is really important, I think, is 

that these are high-paying jobs with an average compensation of 

over $77,000 per year. And these firms also spend tens of billions 

of dollars expanding their facilities, purchasing equipment, and investing in research and development that keeps our economy at the 

cutting edge of innovation. 

So the bottom line: increasing the investment of attracted and retained investment to the U.S. is absolutely critical to growing our 

14 

economy. And the good news is that the United States is the 

world’s largest recipient of foreign direct investment. Companies 

from around the world choose to do business here in the United 

States and take advantage of the unparalleled business climate, 

which includes our innovative and stable market, a skilled and 

well-educated workforce, strong intellectual property rights protection and enforcement, and a stable regulatory climate. 

In addition, the United States has trade agreements with 20 

markets, giving firms with U.S. operations access to a global marketplace. In short, the U.S. is a great place to do business. 

Nevertheless, as the chairman pointed out, economies worldwide, 

as they open up and liberalize, we are now faced from these other 

economies increased competition to attract new investment projects 

and retain existing ones. Our States, regions, and local communities need a federal advocate to help win new investments because 

we are now competing with at least 159 countries that have investment promotion programs, and on average these programs spend 

about $58 million annually. 

In this new climate, the U.S. needs to be actively engaged in foreign direct investment, making SelectUSA a valuable initiative. 

President Obama launched SelectUSA in 2011, as a first-ever U.S. 

government-wide initiative to promote and facilitate business investment in the United States. SelectUSA’s unique services complement States’ efforts and provide federal information and ombudsman services to firms seeking to invest, seeking to remain 

here, seeking to expand or, in many cases now, return to the 

United States. And this work is generating results. 

Since June 2011, SelectUSA has responded to over 600 investor 

inquiries, assisted with over 100 ombudsman cases, and counseled 

nearly 140 U.S. cities, States, and regions. And that is just the 

start. We aim to build on this momentum in a variety of ways. One 

vehicle will be for SelectUSA to host an investment summit from 

October 31 to November 1 right here in Washington D.C. The 

SelectUSA investment summit is designed to highlight the benefits 

of the U.S. business climate to investors and help them engage 

with U.S. economic development organizations. 

In addition, SelectUSA will work to keep pace with the increase 

in investment, inquiries, cases, and, we hope, many successes. It 

will also continue to leverage the partnerships and relationships 

that we have with other federal agencies, as well as creating new 

ones. The Commerce Department will continue do all that it can 

to attract and retain business investment. 

I want to take a moment to thank the other agencies that have 

been diligently working to strengthen this initiative, and I want to 

thank you again for the opportunity to discuss this important topic. 

I welcome your questions. 

[The prepared statement of Mr. Sanchez follows:] 

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Mr. TERRY. Thank you very much. 

At this point we will start our questions, and I really do appreciate you being here. 

Mr. SANCHEZ. Thank you, Mr. Chairman. 

Mr. TERRY. It means a lot to us. And so your statement was very 

strong about the need and the importance of direct foreign investment, and I appreciate the strength of that statement. 

So you agree that we should take a look at approaches to make 

U.S. more competitive in attracting these foreign companies to invest here? That is your mission, right? 

Mr. SANCHEZ. That is part of our mission is to make sure we 

maintain a competitive business climate. 

Mr. TERRY. Does the Commerce Department currently have any 

expertise in evaluating policies that affect our competitiveness in 

the world marketplace in attracting foreign investment? 

Mr. SANCHEZ. One of the things that the International Trade Administration has—and that is the business unit that I have the 

privilege of overseeing—is manufacturing services. And it does a lot 

of outreach to our business sectors. And so we are constantly interacting with them, getting feedback from them on what is working 

and what is not working. And we try to keep that dialogue going 

constantly, and as we learn that, share it with relevant agencies. 

Mr. TERRY. So with that type of collaboration you feel comfortable that you could provide us with a study of where we can 

improve or remove barriers? 

Mr. SANCHEZ. Well, we are not the only agency that can contribute to that, but we certainly have a lot to say on it and we 

would welcome the opportunity to be a part of that dialogue. 

Mr. TERRY. I appreciate that. Now, if a study like this is undertaken, who would you rely on in your staff to help piece this together? 

Mr. SANCHEZ. Well, we have a number of—— 

Mr. TERRY. Is he sitting here today, or she? 

Mr. SANCHEZ. I think part of that team—— 

Mr. TERRY. I think the one with the grin is probably, yes—— 

Mr. SANCHEZ. The one who is feeling the weight of the new task. 

I am sure part of that team is right here in this room. We would 

probably draw on a number of people within the International 

Trade Administration, but I suspect we would want to draw on 

other relevant business units within the Department of Commerce, 

including NIST, PTO, Bureau of Economic Analysis, as well as 

reaching out to other relevant agencies. 

Mr. TERRY. Well, I would appreciate that. And 180 days, do you 

feel that that is an appropriate time period? What is your feedback? 

Mr. SANCHEZ. Mr. Chairman, I probably would want to look at 

the scope of the study before I gave you a specific number, but if 

Congress mandated us to do that, we would certainly make every 

effort to provide a good study within the time requested. 

Mr. TERRY. Fair. You went through a series of numbers—or the 

number of countries that we compete with is what, 160 did you 

say? 

28 

Mr. SANCHEZ. Well, there are at least 159 that have active investment promotion programs and the average budget for those 

programs is about $58 million. 

Mr. TERRY. So did you have any initial beliefs of where we 

should focus to remove barriers, or become stronger—ways to 

strengthen our ability to attract the foreign investment in the 

United States? 

Mr. SANCHEZ. As I mentioned in my testimony, we already start 

with a good attractive business climate. If you look at indicators 

that are put out by The World Bank, the World Economic Forum, 

and other groups, we consistently rank most often in the top 5, perhaps sometimes in the top 10, as one of the best places to do business. So we, fortunately, start from a very good place. 

One of the things that we have to do, and this is why SelectUSA 

was launched, is we have to recognize that more and more countries are seeking in foreign investment. And so we can no longer 

just rest on our laurels, we can no longer just say, look, we are a 

great place to do business; come. We have to actively promote. And 

I think that is one of the areas that we need to really pay attention 

to and that is what SelectUSA seeks to do. And your attention to 

this legislation into this effort is indicative that you and this committee recognize that. 

Mr. TERRY. And in that regard of working in a collaborative way 

you mentioned in your statement with SelectUSA of working with 

the States. What do you feel the States’ roles are and what have 

you seen from the experience of trying to attract foreign investment? How are the States doing? What should they be doing better? Who is doing best? 

Mr. SANCHEZ. Well, I think—and I believe this is the philosophy 

of SelectUSA—is that the States have the primary role of promoting foreign direct investment. That has been their role; it 

should continue to be. SelectUSA should be more of a facilitator, 

a supporter of those efforts. 

So there are things that we are able to do that helps them. For 

example, SelectUSA is leveraging the offices that the U.S. and Foreign Commercial Service have in 72 countries around the world 

and 100 cities here in the United States. And that is an important 

value added that we provide. Most States don’t have that kind of 

coverage. In fact, no State that I know of has that coverage. My 

home State of Florida has 14 offices abroad and I believe that is 

the largest grouping of offices that any State has anywhere in the 

world. 

So presence outside of the United States is very important, helping them reach out as we get leads, connecting them to the economic development organizations. So I think these are the kinds of 

things that we play a very good complementary role with the 

States. 

Mr. TERRY. Thank you very much. And my time is expired. And 

I now recognize the Ranking Member, Jan Schakowsky. 

Mr. SANCHEZ. Thank you, Mr. Chairman. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, and thank you, 

Mr. Sanchez. 

Before I begin our hearing I want to say congratulations. I understand that you are among a short list of candidates being conVerDate Nov 24 2008 12:16 Feb 02, 2015 Jkt 037690 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-32 CHRIS
29 

sidered for the United States trade representative and I wish you 

the very best of luck. 

Mr. SANCHEZ. You are very kind. Thank you very much. 

Ms. SCHAKOWSKY. I have a question about greenfield investment, 

new investment versus merger and acquisitions. Preparing for this 

hearing presented us with some conflicting information. On the one 

hand, we are told that the reason we need to do this study and to 

promote foreign direct investment is because the United States is 

losing investment, as our chairman pointed out, losing investment 

opportunities to other countries such as Mexico and India, developing countries. I would agree that we should be concerned if that 

is the case and we need to promote that U.S. is the best place to 

invest. 

Now, the other hand, the most recent data available indicates 

that 85 percent or more of the foreign direct investment occurs 

through mergers and acquisitions. So if the vast majority of FDI 

is used to acquire preexisting United States’ businesses that were 

previously owned by Americans, I am less clear about the benefits. 

In many cases, a large foreign firm is expanding into the United 

States by buying out smaller U.S. businesses. In these situations, 

the end result is often either the same number of jobs or even 

somewhat fewer jobs. In fact, a recent study concluded that despite 

the productivity gain that is associated with foreign ownership, any 

dollar of foreign direct investment from merger and acquisition 

sales has a weaker effect on growth than a dollar of foreign investment that stems from greenfield investment, which occurs when an 

investor builds a new productive unit from scratch. 

So my question is, if you could tell me what the Department of 

Commerce is doing, what you are doing, your administration is 

doing to distinguish between these two types of foreign direct investment and what changes could be made to the draft legislation 

so it focuses more intensively on greenfield investment? 

Mr. SANCHEZ. Thank you very much, Representative 

Schakowsky, and again, thank you for your kind words at the start 

of your question. 

SelectUSA starts with the premise that the United States has an 

open investment environment. And I agree with you that new investment that creates new jobs is very, very appealing and we have 

had the privilege, through SelectUSA, of working with a number of 

companies that have made those kinds of investments. 

I would also point out, however, that oftentimes there are investments being made acquiring companies that can use that added 

revenue, or in some cases if they don’t get that revenue, those businesses might shut down. And so attracting foreign direct investment that takes over an existing company isn’t always a net negative. In many cases it is a net positive. And so we look at it more 

broadly, that we are attracting investment and that that investment does a number of things. They often buy new equipment. 

They often expand facilities. They then, in turn, often add to our 

exports because what they manufacture here often then gets re-exported. 

So we will continue to focus on supporting investment here that, 

our hope is, will add to the net jobs, as most of the foreign direct 

investment, I believe, has, though I have not had the opportunity 

30 

to read this study. And I will do so, and I would appreciate if I 

could get a copy of that study. 

But generally, we focus on helping attract this investment that 

has all this ripple effect net positive activity for our economy. 

Ms. SCHAKOWSKY. Let me get one more question. The Bureau of 

Economic Analysis at the Department of Commerce is responsible 

for measuring foreign direct investment. BEA used to carry out a 

survey of businesses that differentiated between growth and greenfield investment and investment growth from merger and acquisition. In 2008, it had to cancel this survey for budget reasons but 

the President’s 2014 budget proposes to reinstate it. Why not get 

quickly here—the GAO, NBER, and the National Academy of Public Administration have each recommended that BEA expand its 

foreign direct investment data and that provided specific recommendations to the Bureau on what parts of its efforts would be 

most viable to expand. 

So I commend the Department of Commerce for seeking to resume this collection. Yes or no, should the Congress appropriate 

funding for this survey differentiating between Greenfield investment and investment through acquisitions? 

Mr. SANCHEZ. As I said, Representative Schakowsky, I have not 

read this study, though it sounds like you make a compelling argument for taking a hard look at this since we have done in the past 

through our Bureau of Economic Analysis. And we certainly were 

closely with the Bureau of Economic Analysis and I would certainly 

work closely with them to get this information either through their 

efforts or through other appropriate efforts. 

Ms. SCHAKOWSKY. It used to be that regardless of the policy decision we make as a consequence of having this information would 

inform how we move forward. So I thank you for that. 

Mr. SANCHEZ. Thank you. 

Ms. SCHAKOWSKY. I yield back. 

Mr. SANCHEZ. Thank you very much. 

Mr. TERRY. The gentleman from Missouri is now recognized for 

5 minutes. 

Mr. LONG. Thank you, Mr. Chairman and thank you for being 

here today. 

And Ms. Schakowsky was making reference to a trade position 

that you may be up for, and trade was one of the few things that 

we were able to handle in a very good bipartisan fashion in the last 

Congress up here. So good luck in that endeavor, and if I can be 

of any assistance to you, I would love to. We got the Columbia, 

Panama, and Korea Free Trade Agreements done last year that 

they had not been able to do for 6 or 8 years. 

And we also were successful in extending permanent normal 

trade relations to Russia, which didn’t do anything except help our 

manufacturers. We were already trading with Russia and a lot of 

people didn’t realize that when Russia went into the WTO last 

July, that if we didn’t change some things and change the old Jackson-Vanik law that dated back to the Cold War era—that we needed to get rid of that so that we could help our manufacturers and 

farmers here at home. 

So thank you and good luck on your endeavor there. 

Mr. SANCHEZ. Thank you very much, Congressman. 

31 

Chairman, would you invite me to come regularly to testify before this committee? 

Mr. LONG. I haven’t gotten to the bad part. 

Mr. SANCHEZ. Yes. 

Mr. LONG. I still have time. 

Mr. SANCHEZ. Oh, no. 

Mr. TERRY. You may want to wait. 

Mr. SANCHEZ. Thank you very much. 

Mr. LONG. But what is SelectUSA’s function with regards to 

state and local development organizations, and to what extent are 

the Federal Government’s efforts duplicative of the state and regional economic development organizations? 

Mr. SANCHEZ. Thank you very much for the question, Congressman. 

As I mentioned to Congresswoman Schakowsky, SelectUSA plays 

a facilitator role and we are very much a demand-driven organization, demand driven largely by state and local governments who 

seek out our assistance. And so, for example, we have done about 

140 consulting engagements with state and local governments in 

helping them seek out opportunities, work better with the Federal 

Government on foreign direct investment initiative. 

Mr. LONG. And you have done that through SelectUSA? 

Mr. SANCHEZ. Yes. SelectUSA, which was stood up in June of 

2011, and we have worked with state and local governments from 

the very start. It really is the cornerstone of how SelectUSA works. 

Mr. LONG. Well, I have a personal friend, good friend, that works 

for the State of Louisiana. I am from Missouri—but for the State 

of Louisiana in this type of economic development. And my thought 

was it might be better to allow them to compete than for businesses to handle the promotion and leave the Federal Government 

out of it. The Federal Government is always overreaching, always 

trying to do too much. We have the sequester going on and I just 

question whether this is necessary. 

Mr. SANCHEZ. Well, first of all, the State of Louisiana has been 

a great partner with us. We recently worked on an investment by 

a South African firm by the name of Sasol that is going to make 

a very, very important investment in the State of Louisiana. And 

at the request of the State of Louisiana, we worked very, very 

closely with them in a number of ways. 

One thing that we are doing in that particular example is introducing that company to the relevant federal agencies that they are 

going to have to interact with. So just a few months ago, after the 

announcement, we put together a meeting with all of the relevant 

federal agencies at the Department of Commerce. They all came. 

The CEO of the U.S. subsidiary had a chance to present their 

project to these federal agencies. So that is one example of how we 

are working at the request of the State of Louisiana to support 

their FDI promotion efforts. 

And again, as I mentioned in an earlier response to question, 

through the U.S. Foreign Commercial Service we have offices in 72 

countries around the world. No State has that kind of reach outside. The State of Florida has 14 and that is the most of any State. 

And we are able to leverage those offices to identify potential comVerDate Nov 24 2008 12:16 Feb 02, 2015 Jkt 037690 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-32 CHRIS
32 

panies, potential targets. And we are going to continue to play the 

facilitator role, not the lead role, but the facilitator role. 

One more thing, Congressman, is that we are competing against 

159 other countries that use the full weight of their efforts of their 

governments to advocate on behalf of investment in their country. 

And when we are competing, say against Mexico or Canada or perhaps a country in Europe versus United States, it really does help 

to have a federal advocate supporting that investment right here 

in the United States. 

Mr. LONG. Wouldn’t you agree that it would go a long way is if 

we tried to make this the best place in the world to do business? 

Mr. SANCHEZ. It is and I am all for that. 

Mr. LONG. I think we have got some work to do there and I yield 

back. 

Mr. SANCHEZ. Thank you. 

Mr. TERRY. Thank you, Mr. Long. I now recognize the gentleman 

from California, Mr. McNerney, for 5 minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. Sanchez, I appreciate you coming to my district a year or two 

ago. It was a very successful event and we heard a lot of positive 

feedback from that. 

Mr. SANCHEZ. Well, thank you. We did an export promotion event 

as I recall. 

Mr. MCNERNEY. That is right. I appreciate that. 

I am also interested in ensuring that the American firms are 

able to find local talent to fill skilled labor positions, and I support 

the SelectUSA initiative. 

I am also curious about any partnerships you may have with 

educational institutions. Does the initiative include efforts to address deficiencies in our educational system to make sure that our 

workers are attractive to businesses as they move into this country? 

Mr. SANCHEZ. We are very much aware that, while we have a 

very well-educated workforce, we have some gaps in technical 

training. And although the Department of Commerce does not itself 

have programs that are focused on education or technical training, 

we are working very closely with the Department of Labor, with 

the Department of Education, with the Department of Defense that 

has programs in place of finding jobs for returning military personnel, as well as spouses of military personnel. 

So we certainly provide feedback and look for ways to work with 

our federal agencies in identifying ways that we can help with this 

gap in technical training. 

Mr. MCNERNEY. But you don’t have the relationships with universities, or technical schools to give them guidance in what would 

be useful to employers? 

Mr. SANCHEZ. The Department of Commerce certainly interacts 

regularly with educational institutions, but we defer to our sister 

agencies who have a more direct role in education, whether it be 

the Department of Labor or the Department of Education. 

Mr. MCNERNEY. Well, you have been around many districts in 

this country and seen a lot of what the local governments due to 

attract investment and businesses to come into their communities. 

Could you give us just a couple of little examples of how that has 

33 

been helpful or hurtful to the effort of local communities? Some of 

the things that the local communities have done that have been 

helpful, if you could, and some that have been hurtful, just to give 

us an idea of what might be useful. 

Mr. SANCHEZ. Well, I would say the first thing is just showing 

up. And that is actually having a presence in the market, letting 

the world know that they are open for business, they want to attract foreign direct investment. And so those communities and 

those States that really make this a priority, really put together a 

robust promotion program, are going to do better. And so I would 

encourage States to take an active role. And part of the role of the 

SelectUSA is helping States and helping local communities put together robust export promotion programs. 

Mr. MCNERNEY. So, for example, right now, Governor Brown, the 

Governor of California, is in China promoting California as a place 

to do business and you are suggesting that that is helpful and positive. 

Mr. SANCHEZ. Increasingly, governors and other local leaders are 

going overseas to attract foreign direct investment, and I think 

that that effort should pay dividends. It seems to in a number of 

States, and I am sure it will pay for California to be active internationally. 

Mr. MCNERNEY. What about the negative side? Are there things 

that some of our local governments are doing that are detrimental 

to our trade attractiveness? 

Mr. SANCHEZ. Well, I believe that just like the United States 

needs to be attractive, create a good business climate—and generally we do that, at least as evidenced by the indicators of the 

World Economic Forum, the World Bank, and other indicators, so 

do local communities and state governments. So to the extent that 

they create attractive business climates, there are going to do well. 

And to the extent that they don’t compete as effectively with other 

communities—and I would say I am using the term communities 

not just within the United States, but they are now competing with 

communities around the world. I would say communities need to 

measure themselves against communities worldwide. And that to 

me is an important effort for States and communities that want to 

be serious about attracting investment. 

Mr. MCNERNEY. Well, you know if I was a Beijing businessman 

and I was breathing the air in Beijing day in and day out, I would 

look at the San Francisco Bay Area and say, hey, this is a much 

cleaner place. I would like to go there. Does that come in to the 

calculations at all for those folks, do you think? 

Mr. TERRY. May I suggest Omaha’s air is even cleaner than San 

Francisco’s. 

Mr. MCNERNEY. I yield back. 

Mr. TERRY. All right, the gentleman from West Virginia, Mr. 

McKinley, you are recognized for 5 minutes. 

Mr. MCKINLEY. Thank you. Secretary Sanchez, at the risk of 

ending the kumbaya questioning that have occurred here, I have 

got two questions that I am curious where you may be coming from 

on. The easier one, perhaps, first is, we of numbers of businesses 

in our district that they are small companies that have been victims of dumping, and Commerce has told them that they can file 

34 

an action and they have pursued that but they find out it is going 

to cost, for example, in this one 1.2 million to file an action. These 

small companies can’t afford $1.2 million to fight that, so they are 

giving in. And as a result, we are seeing more dumping occurring 

here in this country. 

Is there a role for the government, perhaps, to step in for companies that are undervalued or have the inability to come up with 

$1.2 dollars to fight? Is there someplace that we might be able to 

help them? 

Mr. SANCHEZ. Congressman, I share that frustration. I have, 

under the—— 

Mr. MCKINLEY. What is the solution? I don’t want the whining 

because that is what I am doing. 

Mr. SANCHEZ. Yes. 

Mr. MCKINLEY. I am trying to find what is the solution? 

Mr. SANCHEZ. We make every effort to help companies prepare 

for an antidumping petition. Within the budget constraints that we 

have, within the staffing constraints that we have, we make every 

effort to provide advice and counsel for them. That has its limits, 

but we do everything that we can to help small and medium-size 

companies that feel that they are being hurt by companies that are 

dumping. And so within those constraints, we do everything that 

we possibly can and I suspect that we are not able to do all that 

we could or all that would like to—— 

Mr. MCKINLEY. We really you don’t have—other than maybe giving some help, there is no way to help pick up that cost for them? 

Mr. SANCHEZ. Within the existing budget that we have, we do 

what we can. 

Mr. MCKINLEY. OK. Second question is further to do with dumping. We know that foreign companies, their dumping doesn’t all 

occur in one; it can be spread out over different businesses. But one 

company may be—so it is called, as you know, is targeted dumping. 

And this administration has just come out in supporting some recent determinations on targeted dumping, particularly about Fu 

Fang Biotechnical. And that decision or that report has just come 

out in early March. Are we revisiting that or is this something 

that—because we know that Fu Fang had 68 percent of its sales 

varied among different customers, so they can dump on one and 

then charge more in another, and that avoided their dumping 

charge. How can we protect that if the administration is saying I 

will support that? And they have that—he signed off on this on 

March 4, said he agrees with that process. 

Mr. SANCHEZ. Congressman, I need to review that particular case 

before I respond on that. I do know that we do, I believe, a very 

good job within the constraints that we have of enforcing our trade 

laws, we also do it in compliance with our international obligations. 

And I would need to look at this little more carefully, and I would 

be happy to do so and get back with you. 

Mr. MCKINLEY. I hope you can, because we are seeing—just 20 

some years ago we had a very vibrant steel industry in the northern section of West Virginia with 30,000 steelworkers. We now 

have less than 1,000 steelworkers. Now, think about that. Primarily, they will say up and down the line that this had to do with 

trade and dumping. And I hear a lot of people talking about trying 

35 

to help but I don’t see the activity. I don’t see where that has really 

stepped in. People said we will look at it. We will reconsider that. 

But in the meantime, nearly 30,000 steelworkers have lost their 

jobs. 

And here it is again where people are saying they can’t come up with $1.2 million to fight back against these agreements and then 

the administration coming out and saying they are going to support 

this decision. I just wanted to question you about that. If you can 

find it—I don’t see a number on it, but I will be glad to give you 

my copy. 

Mr. SANCHEZ. Thank you. I promise to look into it and get back 

to you. 

Mr. MCKINLEY. OK. Thank you very much. 

Mr. SANCHEZ. Thank you, Congressman. 

Mr. TERRY. Thank you, Mr. McKinley. Mr. Pompeo of Kansas, 

you are recognized for 5 minutes. 

Mr. POMPEO. Thank you, Mr. Chairman. Good morning, Mr. Secretary. 

In your written testimony you expressed that one of the concerns 

foreign companies often have in considering direct investment is 

their difficulty entering and exiting at U.S. borders. A major employer in my district, Learjet, has a major foreign direct investment 

from a company called Bombardier in Canada. They are a great 

employer in our district. They have done a phenomenal job of taking care of our team in Kansas and building a great airplane. 

They have a shuttle in which they fly employees back and forth 

from different facilities in Mexico and Canada. They bring team 

members; they bring parts back and forth. They have been prevented from flying directly in to Wichita because of the Customs 

and Border Protection folks said they don’t have the requisite staff 

on site. It forces Bombardier to clear customs someplace else late 

at night. It is very, very challenging and costly and, I think, discouraging to them to continue to grow their asset in Kansas. I 

know the company has worked very hard to try and coordinate 

with customs. Our offices have tried to do the same. We have engaged your folks, the ombudsman’s office, in that process. But we 

have had little success, to be honest with you, getting CBP to become engaged. 

Thoughts on how that process may be strengthened so that companies that do put their capital risk in America can get in and out 

and do the things they need to do, both to be successful in their 

endeavors but also to grow jobs in America? 

Mr. SANCHEZ. Well, Congressman first of all, thank you for 

reaching out to SelectUSA to let us work on that. Bombardier has 

been a great source of foreign direct investment. They spent a lot 

of money here, created a lot of jobs, and I believe we are still working on that case. What I can tell you is that I will personally follow 

up with our team and also reach out to Customs and Border Patrol 

and see what options that might exist. 

I know that over the last several years they have made a special 

effort to balance the needs of security at the border with making 

sure that they don’t impede legitimate business. And I applaud 

them for that effort and we are going to continue to work with 

them more broadly on policies that make it easy for businesses like 

36 

Bombardier to invest here. And I will personally look into this one 

in particular. 

Mr. POMPEO. Thank you, I appreciate that. Actually, this is happening in districts all costs country, the same issue. And so it is 

just very important that these folks can get in and do the business 

they need to do here or they will ultimately be discouraged from 

those investments. 

Changing topics just a little bit, we had a long hearing on the 

Keystone XL pipeline yesterday, lots of different views, but I would 

be interested in your take. Do you think that this kind of highly 

visible, highly politicized discouragement of foreign direct investment is being observed by other folks who may want to bring capital to America and has an impact on their decisions to invest here 

in the country? 

Mr. SANCHEZ. Well, Congressman, I think that everything that 

we do, particularly from an investor’s point of view, gets looked at. 

I will say this: that in general, this case I know there are a lot of 

strong opinions on both sides. One of the good things that we do 

have going for us is that energy costs here are going down. And 

that is increasingly becoming an attractive incentive to bring investment to our shores. So we certainly are focusing on ways to 

highlight that and it is my hope that we will continue on that path 

and we will be able to use that as an opportunity to bring more 

investment here to the U.S. 

Mr. POMPEO. Great. I appreciate it. I just think when companies 

want to come here and do business and follow our laws and all of 

our processes that to have an administration just make it so difficult and so political and put them through the ringer, I think the 

world watches when these things happen and I don’t think it is 

productive to what it is that you all are trying to accomplish and 

what we are trying to do here through this legislation this morning. 

You know, the last thing I will say, so we have a piece of legislation we are debating that directs this interagency study. I think 

there are lots of studies out there. I think we all have a pretty good 

handle on what folks are looking for when they make capital decisions to decide whether to invest here or not. So I am happy to 

take a look at this and see what it is going to cost and how much 

burden it is going to place. But I think we all have a deep recognition of what it is, what folks are really looking for when they are 

trying to figure out where to spend their money and invest. So 

thank you for being with us this morning. 

Mr. SANCHEZ. Thank you, Congressman. 

Mr. POMPEO. I yield back, Mr. Chairman. 

Mr. TERRY. Thank you, Mr. Pompeo. And that concludes our 

questions for you, Secretary Sanchez. I appreciate your time. We 

tell witnesses after they are finished testifying that we may have 

written questions that will be submitted to you and I know I have 

a few. But they are along the same—— 

Mr. SANCHEZ. Great. 

Mr. TERRY [continuing]. Lines of just trying to gather information to help us guide our efforts here. So if you can respond to 

those in a timely manner, we would greatly appreciate it. 

37 

Mr. SANCHEZ. I look forward to receiving your written questions 

and I thank you and the ranking member and the members of this 

committee for the opportunity to speak on this very important 

topic, and I appreciate your interest in this. Thank you very much. 

Mr. TERRY. Well, thank you for your efforts. 

And now, we will take a slight pause as we rearrange chairs for 

the next panel. 

Thank you, everybody. I want to introduce this panel. We have 

Nancy McLernon, President and CEO of the Organization of International Investment; Linda Dempsey, Vice President of International Economic Affairs of the National Association of Manufacturers; Matthew Slaughter, Associate Dean for Faculty, Tuck 

School of Business, Dartmouth University; Dr. Martin Baily, Senior 

Fellow of Economic Studies at the Bernard Schwartz Chair of Economic Policy Development with the Brookings Institute; then, last 

to testify in line would be Celestine Drake with the Trade and 

Globalization Policy Specialist with the AFL-CIO. 

And welcome, all of you. Thank you for coming here today. And 

we will start right away. Each of you will have 5 minutes. At 5 

minutes if you are still talking, I will lightly tap and that will 

mean summarize. 

So now, Ms. McLernon, you may begin. 

STATEMENTS OF NANCY L. MCLERNON, PRESIDENT AND CEO, 

ORGANIZATION FOR INTERNATIONAL INVESTMENT; LINDA 

DEMPSEY, VICE PRESIDENT, INTERNATIONAL ECONOMIC 

AFFAIRS, NATIONAL ASSOCIATION OF MANUFACTURERS; 

MATTHEW J. SLAUGHTER, ASSOCIATE DEAN FOR FACULTY, 

TUCK SCHOOL OF BUSINESS, DARTMOUTH UNIVERSITY; 

MARTIN BAILY, SENIOR FELLOW, ECONOMIC STUDIES, BERNARD L. SCHWARTZ CHAIR IN ECONOMIC POLICY DEVELOPMENT, BROOKINGS INSTITUTE; AND CELESTE DRAKE, 

TRADE AND GLOBALIZATION POLICY SPECIALIST, AFL-CIO 

STATEMENT OF NANCY L. MCLERNON 

Ms. MCLERNON. Good morning. Chairman Terry, Ranking Member Schakowsky, and distinguished members of the subcommittee, 

I want to thank you for the opportunity to testify this morning. I 

applaud your leadership in holding this timely hearing on legislation to enhance the Nation’s ability to attract and retain global investment. 

The Organization for International Investment is an association 

exclusively comprised of U.S. subsidiaries of global companies. Our 

mission is to ensure the United States remains an attractive and 

the most attractive location for global investment. 

This hearing comes at a time when the United States is at a 

crossroads facing serious economic and fiscal challenges. And while 

the U.S. remains the top location for foreign direct investment, its 

share of worldwide FDI has dropped significantly over the past decade. This really is a national challenge, one that impacts every 

State in every congressional district in this country. Simply put, it 

is no longer enough for the U.S. to merely be open to global investment. We must proactively have a strategy to leverage all the tools 

within our reach if we hope to remain competitive for high-value 

38 

FDI. For this reason, my organization and our member companies 

strongly support the Global Investment in American Jobs Act of 

2013. 

FDI has long been a catalyst for economic growth in this country. 

U.S. subsidiaries of global companies in-source 5.6 jobs to the 

United States and support an annual payroll of over $400 billion. 

Their employees earn an average compensation well above the private sector average pointing to the high-end nature of the activities 

that they have in this country. These companies are in high-value 

fields like advanced manufacturing, life sciences, R&D, and engineering, generating the types of jobs and economic activities that 

enhance U.S. competitiveness. Furthermore, they reinvest heavily 

in their U.S. operations and spend heavily on new equipment, upgraded facilities, and new construction, all of which demonstrate a 

long-term commitment to their U.S. operations. 

I will give you a few examples: Astellas pharmaceutical R&D facility in Northbrook, Illinois; Case New Holland exporting 

Unionville tractors from Racine, Wisconsin; Philips Healthcare developing advanced medical imaging technologies in Highland 

Heights, Ohio; and Rolls-Royce partnering with local Virginia 

schools to teach STEM education and train manufacturing workers 

in Prince George County. 

But in spite of all these vital contributions, the extent of their 

impact throughout the economy is actually not very widely understood. FDI has traditionally occupied something of a blind spot in 

U.S. policy. The growing importance of global cross-border investment makes it essential for FDI to play a more prominent role in 

U.S. economic policy in the years ahead. And the potential for additional FDI provides a tremendous opportunity for economic growth 

in the U.S. 

As I mentioned earlier, the U.S. share of global cross-border investment has dropped. We currently garner about 17 percent. 

There is no reason we cannot grab more market share. Additionally, the United Nations estimates that multinational companies 

are currently sitting on some $5 trillion in cash in the wake of the 

global economic downturn. We can give those companies a reason 

to unleash that investment here. 

While there are no magic formulas, enhancing U.S. competitiveness for FDI will certainly require progress in key macro policy 

issues, including reforming our tax code, advancing a more expensive Free Trade Agreement, modernizing America’s infrastructure, 

implementing a program with energy policy, and developing a 

workforce that can compete for the jobs of the future. 

But importantly, we must also make sure that once the U.S. 

wins a new investment that we provide good aftercare and we ensure that the U.S. subsidiaries of global companies have the ability 

to succeed and grow their business here on a level playing field 

with homegrown companies. The U.S. must avoid policies and regulations that disadvantage or discriminate against companies that 

are headquartered abroad. 

Given our unique advantages, the U.S. is fully capable of improving its competitive edge for FDI. We have an enormous domestic 

market, abundant natural resources, strong rule of law, and a culture of innovation and productivity. We need to couple those advanVerDate Nov 24 2008 12:16 Feb 02, 2015 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-32 CHRIS
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tages with a better understanding of what kinds of policies and 

best practices position the U.S. to successfully recruit global companies. 

The Global Investment in American Jobs Act seeks to do just 

that. The legislation recognizes that the U.S. cannot compete for 

21st century investment with a 20th century policy mindset. It 

aims to equip policymakers with a forward-thinking strategic approach to capture new investment in this increasingly competitive, 

yet opportunity-rich, global environment. The interagency review 

and recommendations would provide Congress a roadmap for further action to attract global manufacturers, service providers, and 

innovators to our shores. If enacted, the legislation will send a powerful message at home and abroad that the U.S. is working to improve its investment climate for FDI in a thoughtful and bipartisan 

manner. 

I would like to thank the subcommittee again for the opportunity 

to testify and I look forward to questions. 

[The prepared statement of Ms. McLernon follows:] 

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Mr. TERRY. Well done. Ms. Dempsey, you are now recognized for 

your 5 minutes. 

STATEMENT OF LINDA DEMPSEY 

Ms. DEMPSEY. Thank you. Good morning, Chairman Terry, Ranking Member Schakowsky, and members of the subcommittee. I welcome the opportunity to testify today on behalf of the National Association of Manufacturers, the oldest and largest industrial trade 

association in the United States. 

The NAM represents small and large manufacturers in every industrial sector and in all 50 States, including many foreignheadquartered companies that manufacture throughout our Nation. 

As this subcommittee knows well, manufacturing is the engine that 

drives the U.S. economy by creating jobs, opportunity, and prosperity. A robust international trade and investment approach are 

vital to the success of manufacturing in the United States. 

In particular, FDI into the United States plays a critical role in 

growing manufacturing. While fluctuating yearly, foreign investment in manufacturing has shown substantial growth since 2003, 

with important benefits for the U.S. economy. In 2012, FDI inflows 

into the United States in manufacturing equaled nearly $83 billion, 

accounting for nearly half of those inflows. 

While the United States has remained the largest recipient of 

FDI through 2012, we have heard from my colleague that global 

competition for FDI is rising sharply and the U.S. share of that 

FDI is on the decline. From the NAM’s perspective, we should be 

working to help grow FDI into the United States, which grows 

manufacturing and jobs, innovation, and economic opportunities. 

The NAM’s 2013 Growth Agenda presents four goals for manufacturing resurgence in America. The NAM’s first goal is very much 

the subject of this hearing: to make the United States the best 

place in the world to manufacture and to attract FDI. The goal of 

the legislation before this subcommittee is an important one: to 

spur policy improvements that will help the United States further 

attract FDI, including through requiring an interagency review of 

policies and best practices with recommendations for further action. We hope the report will result in concrete proposals and action and encourage the Subcommittee to continue working on this 

legislation and moving it forward. 

We also recommend that the report consider the recommendations from the President’s Council on Jobs and Competitiveness, 

which called for a national investment initiative. 

The U.S. open investment policy that this legislation reaffirms is 

supported through a number of different aspects of U.S. law, regulation, and policy. The United States generally treats FDI on a 

nondiscriminatory basis, unless there is a threat to national security as determined by CFIUS. 

The U.S. open investment policy is also supported through the 

U.S. Bilateral Investment Treaty program, BITs, which began 

about 4 decades ago. The United States has in place 38 BITs including, most recently, with Rwanda that secure reciprocal and 

open investment frameworks with interested countries. The BIT 

program helps secure U.S. investment abroad, which is also focused 

on reaching consumers and is a huge driver of U.S. exports, as well 

50 

as R&D and capital expenditures here in the United States. A robust BIT program, which includes the strong investor state enforcement mechanisms, is a vital part of the U.S. open investment policy. 

Yet, given the increasingly competitive environment for FDI, the 

United States cannot stand still. From the manufacturing perspective, the United States faces significant challenges of our own making. It is 20 percent more expensive to manufacture in the United 

States than in other major industrialized nations. The United 

States continues to have the highest corporate tax rates among 

major industrial countries, and 2/3 of all manufacturers pay taxes 

at the individual rate. 

To make the United States the best place in the world to manufacture and attract FDI, we urge Congress and the administration 

more broadly to work together to create a national tax climate to 

promote manufacturing and embrace an all-of-the-above approach 

to energy, modernize and invest in infrastructure, ensure that the 

benefits of regulations justify their cost, implement commonsense 

legal reform, reduce healthcare costs, and ensure robust export opportunities for manufacturers in the United States, including 

through an aggressive trade policy agenda, have open markets, and 

provides competitive export financing, and works to ensure that 

our trading partners protect intellectual property and play by the 

rules. 

By addressing the multitude of these policies that shape global 

competitiveness, the United States will be able to increasingly attract and retain the kind of foreign investment to sustain and grow 

manufacturing here in America. 

Thank you. 

[The prepared statement of Ms. Dempsey follows:] 

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Mr. TERRY. Wow, perfect timing. 

Mr. Slaughter, you are now recognized for your 5 minutes. 

STATEMENT OF MATTHEW J. SLAUGHTER 

Mr. SLAUGHTER. Thank you, Chairman Terry, Ranking Member 

Schakowsky, and fellow members. Thank you very much for inviting me to testify on these important and timely issues of how global investment can contribute to American jobs and overall economic 

strength. 

In my remarks, I will stress that although the U.S. subsidiaries 

of global companies have long made large contributions to U.S. jobs 

and overall economic strength, the past need not be prologue. 

There recently were some trends that America’s attractiveness to 

these companies may be waning. To support the U.S. economy 

amidst a still-fragile labor market and overall recovery, policymakers should strive to sustain an environment in which global 

firms can thrive here. 

Research for the United States and many other countries has 

long documented that globally engaged companies tend to perform 

better than purely domestic companies do. The U.S. subsidiaries of 

global companies, despite accounting for far less than 1 percent of 

all U.S. businesses, perform large shares of America’s productivityenhancing activities that lead to high average compensation for 

American workers. 

For the most recent year of data available, 2010, or as of this 

morning, 2011, contributions of these companies included the following: 5.8 percent of all private sector output, over 14 percent of 

all nonresidential private sector capital investment, almost 18 percent of U.S. exports of goods, and over 14 percent of the total research and development perform by all U.S. companies. All of these 

activities contribute to millions of well-paying jobs in America. 

In 2011, these U.S. affiliates employed 5.6 million workers, 5 percent of total private sector employment. In 2010, their total compensation averaged over $77,000 per worker, more than 1⁄3 above 

the average for the rest of the private sector. Of these jobs, nearly 

2 million were manufacturing and the U.S. subsidiaries of global 

companies have long had relatively high unionization rates. In 

2007, over 12 percent of these firms U.S. employees were covered 

by collective bargaining versus just about 8 percent for all private 

sector workers. 

And finally, U.S. subsidiaries of global companies support U.S. 

jobs through their supply chains. In 2010, these subsidiaries purchased almost $2 trillion in intermediate inputs from other U.S. 

companies. 

Despite these strengths of the past, over the first dozen years of 

the 21st century two worrisome trends emerged regarding the presence and dynamism of U.S. subsidiaries in global companies. First, 

although many of their non-employment activities continued to 

grow, their U.S. employment did not. There were about the same 

number of Americans working in these companies in 2011 as in 

2002. 

The second worrisome trend is that the U.S. share of global foreign direct investment has fallen sharply. The U.S. share of the 

63 

world stock of FDI fell from over 41 percent in 1999 to only about 

17 percent in 2009. 

Taken together, these two worrisome trends of the past decade 

suggest that the U.S. economy has become a less attractive location 

for global companies to establish and expand their operations. And 

these trends have emerged while a steadily rising share of the 

leading global companies are headquartered outside of America. 

The options that the world presents to global companies have expanded dramatically in recent years due to policy liberalization and 

related accelerated economic growth in so many countries. The 

United States cannot rest on past success and take the U.S. engagement of these global companies for granted. 

A vigorous optimistic future for inward investment in America is 

very possible, but achieving this optimistic future will require 

crafting new U.S. policies to boost FDI inflows and the related employment and other productivity-enhancing activities of these companies. 

An important first policy step would be for the Secretary of Commerce to oversee an interagency review and report of America’s 

global competitiveness in attracting FDI, as specified in the Global 

Investment in American Jobs Act of 2013. The baseline information 

from this report would provide an excellent guide to refining U.S. 

economic policies and promotion and ultimately U.S. economic performance. 

Let me here recommend second important policy step: higherquality U.S. Government data. U.S. Government statistics currently do not capture the full extent and evolution of the U.S. operations of global companies. This is in no way a fault of the dedicated public servants working at these statistical agencies. Rather, 

it simply reflects the fact that many of the business surveys conducted and analyzed by these agencies were created decades ago in 

ways that today fail to encompass the modern and ever-evolving 

complexity of business in America. 

Here in the 21st century, if we want to best craft U.S. economic 

policies to support American workers and their families, then we 

need to find a way to update and expand many of our key economic 

statistics on how these global companies work. 

Thank you again for your time and your interest in my testimony, and I look forward to answering any questions that you may 

have. 

[The prepared statement of Mr. Slaughter follows:] 

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Mr. TERRY. Thank you. And Dr. Baily, you are now recognized 

for your 5 minutes. 

STATEMENT OF MARTIN BAILY 

Mr. BAILY. Thank you. Thank you, Chairman Terry and Ranking 

Member Schakowsky, and the other members of the committee for 

the opportunity to present my testimony today. I would like to submit the full statement for the record if I may. And there are a couple of typos in it that I would like to correct before it gets submitted, which I just discovered. 

I do think that making America the location that attracts good 

foreign companies is a very important task. And I think really the 

same things that attract foreign companies will encourage American multinational companies to invest more in the United States. 

And as one of the earlier panelists noted, there is a lot of money 

sitting out there that we would love to see invested here to improve 

the recovery. 

There have been quite a few numbers already put out here and 

I am going to just comment on them rather than reprise what is 

in my testimony. I just want to comment on a couple of them. One 

is, I think, it is obviously a concern if our share of FDI has gone 

down. I think there is a certain thought that it is inevitable with 

emerging economies growing. They are much poorer than we are. 

They are growing faster than we are. There is going to be more investment taking place in those economies than in the U.S., so I 

don’t think we should get down on ourselves too much if we find 

that investment elsewhere is growing relative to the U.S. I think 

that is just part of life. 

And the second point I would make is to note that really a lot 

of the investment that comes from overseas is going into manufacturing. I think that is important. We have heard that the manufacturing sector is important. It is an area where we maybe haven’t 

had enough domestic investment. We would like to see more. We 

want exports to grow. We want to get a more balanced trade picture for the United States so I think it is particularly helpful that 

foreign investment comes into the U.S. 

One thing, though, to remember, since a lot of the investment is 

concentrated in manufacturing and since manufacturing employment generally has been on a rather declining trend as a fraction 

of total employment, we are going to see that the employment in 

foreign companies in the United States is not necessarily going to 

look as good as investments in some other industry just because of 

the industry that they tend to be in. And again, I don’t think that 

is something that we are necessarily going to change because manufacturing is an area with a lot of productivity growth, a lot of automation, and so employment growth tends to be slower there or 

declining there relative to other industries. 

The other point I would notice on the investment is that so much 

of it comes from Europe and Japan, really our friends and allies, 

and I think that does make a difference in the way that we think 

about it. Many of these companies are used to operating with environmental regulations. They are used to operating with their labor 

standards and so on. So I think a lot of the companies that are 

coming in such as from Germany, from Switzerland, and so on, 

70 

these, by and large, are going to be good neighbor companies in 

terms of what they do and the practices that they have. 

I say a little bit in the testimony about pros and cons. Since I 

have only got 2 minutes left, I am going to talk a little bit about 

what I think might be the best ways to make the United States 

more competitive. 

The first thing I will say is we need to get the macroeconomics 

right. I know it is a hard concept to get across, but I think as long 

as we have a shortage of national saving over national investment 

in our economy, we are going to be running trade deficits because 

one is the counterpart of the other. So while I don’t want to balance 

the budget tomorrow, I think that would be disastrous in a weak 

recovery. I do think that is something we need to do over the next 

10 years. We have to make room for more export growth, more 

manufacturing growth, and one way to do that is to get a better 

balance between saving and investment. 

The second point I would make is on trade agreements, and I 

think that is something where, you know, it would be great to work 

on a multilateral basis. If not, we do need to work, as I think you 

said here, on bilateral agreements. That is where one of the typos 

is. One of the major German auto companies that has invested in 

the United States to serve the U.S. market has decided to locate 

one of its other plants in Mexico because that is a location where 

they are going to export from primarily. And they feel they have 

better trade agreements operating in Mexico than they would in 

the United States. So, I think, that is a sign that we need to do 

more on the trade agreement side if a company that, say, wants to 

wants to export into Latin America decides to locate in Mexico 

rather than in the U.S. 

On the corporate income tax, I agree with the sentiment generally. I think, you know, again, we need to get more tax revenue 

from somewhere. I don’t see how we are going to balance the budget over 10 years if we don’t get more tax revenue. But we have to 

recognize that corporations are mobile. We have to be in step with 

other countries around the world, both in terms of what our marginal tax rate is and whether or not we tax companies on their foreign earnings or whether we tax them on the activities that they 

do here in the United States. So I think basically we need to get 

our corporate tax in line with where our competitors’ is. 

I am running out of time here, but just quickly I think we do 

need to do a bit more to improve the skills of our workforce. There 

are good community colleges that are doing that. The Department 

of Defense has shown some tremendous ability to give them their 

soldier skills in short periods of time, so I think there are a lot of 

things we can do in terms of vocational training and technical 

training to improve the quality of our workforce. And it is not that 

the workers are bad; it is just that they don’t have some of the 

skills that they need. 

And then, finally, I will mention taking advantage of the energy 

boom and that has been mentioned here already. I think this has 

been a massive change—a game changer—for the U.S. economy, 

this discovery of energy sources. I think there are environmental 

concerns about it, absolutely. But I think we can meet those concerns and have cheaper energy, cheaper natural gas, which will 

71 

really increase the attractiveness of the United States, both for domestic companies and for foreign companies. Thank you. 

[The prepared statement of Mr. Baily follows:] 

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Mr. TERRY. Thank you very much, Dr. Baily. 

And Ms. Drake, you are now recognized for 5 minutes. 

STATEMENT OF CELESTE DRAKE 

Ms. DRAKE. Thank you, Chairman Terry, Ranking Member 

Schakowsky, members of the committee. Good morning. I appreciate the opportunity to testify on behalf of the AFL-CIO on the 

critical issues of economic development and job creation. I have 

submitted written testimony for the record and will highlight a few 

key points here. 

Any discussion of where our economy is going should begin with 

a discussion of where we have been. Between the Great Depression 

and 1980, America’s economic strategy centered on policies designed to ensure a virtuous cycle of rising productivity, rising 

wages, and increase public and private investment that led to even 

greater productivity. Regulatory policy was critical to this strategy, 

including food, product, and workplace safety, a strong minimum 

wage, and the National Labor Relations Act giving workers the 

right to organize and bargain collectively. This national strategy 

led to the period of the highest sustained economic growth in 

American history and gave birth to the modern American middle 

class. 

Since 1980, the United States has embraced a different economic 

strategy, one that has reversed the prior pattern of shared prosperity. We have sought to maintain our status as the world’s largest consumer market while at the same time seeking to compete 

globally by lowering our labor costs. As part of this approach, the 

overall direction of regulatory policy since 1980 has weakened 

worker protections to reduce labor costs, left consumers and investors at the mercy of bad actors on Wall Street, and even promoted 

consolidation instead of competition in certain sectors. The result 

has been, not surprisingly, a series of financial bubbles and skyrocketing consumer debt. 

As the Committee looks to increase foreign direct investment as 

one of the many tools we can deploy to help restore the American 

dream, the AFL-CIO would like to be a partner in that effort. We 

welcome foreign investment, as you do, but we caution that the review proposed in the discussion draft of the Global Investment in 

American Jobs Act of 2013 should be performed carefully, lest its 

recommendations prove more harmful than helpful. 

While we welcome the changes made from last year’s version of 

the bill, we continue to have serious concerns. For example, by not 

excluding from the review laws and regulations of general applicability, it is possible that those performing the review will consider 

financial services policies, such as Dodd-Frank, or important worker protections, including occupational health and safety rules, as 

near barriers to investment. Instead, we suggest that the review 

regard them as important to providing a good investment climate 

that includes a stable financial system and healthy and productive 

workforce. 

As you know, the U.S. is a premier destination for foreign investment. In comparison to other countries in which investors are required to create joint ventures for nearly every investment or pressured to transfer important technology or intellectual property, the 

82 

U.S. has a very open system. There are, of course, a few important 

limitations on foreign ownership and control, such as those in the 

aviation and communication sectors. Again, the AFL-CIO encourages the Committee to ensure the review takes a balanced look at 

these limitations and consider their very important public purposes 

before simply categorizing them as barriers to investment. 

These policies are designed with important purposes, including 

national security and domestic economic growth. In some cases 

they may even encourage investment as foreign enterprises seek to 

become American enterprises to expand their reach, which brings 

me to a final caveat. The AFL-CIO urges the Committee to ensure 

that the review recognize that while FDI can contribute to the creation and maintenance of high-skilled, high-paying jobs, such an 

outcome is not inevitable. State-owned and -controlled enterprises 

in particular may not invest with a goal to operate in the U.S. for 

the long-term, but instead, could acquire strategic technology that 

could, at worst, jeopardize our national security. They may also engage in predatory or anticompetitive behavior that our trade remedies cannot reach to their operations here, or they may operate 

their businesses in ways that could reduce average wages, benefits, 

and working conditions instead of lifting them up. 

Given these risks, we also encourage the Committee to consider 

reversing the current policy of providing foreign investors with extraordinary legal rights through FTAs and investment treaties. 

In sum, we look forward to working with you to promote the 

growth of the American economy through investment that creates 

high-wage, high-benefit jobs that restore the path to middle class. 

I thank the committee for its time and would be pleased to answer 

any questions you may have. 

[The prepared statement of Ms. Drake follows:] 

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Mr. TERRY. Thank you, Ms. Drake. 

And now, we go to the question part of our hearing. 

And so my first question will be to Ms. McLernon, Ms. 

Dempsey—well, we will just go right down the panel. Give me your 

opinion in helping us prioritize what is the most significant barrier/ 

incentive that is either blocking or helping foreign investment in 

the United States. In essence, what is the low-hanging fruit? Ms. 

McLernon. 

Ms. MCLERNON. Great question. So I think what is really important about this bill is that it seeks to uncover those very things. 

We mentioned all the macro issues here today that, in general, can 

provide a better business opportunity. But our policies over the 

long haul don’t really take a look at the impact that they will have 

on companies that are not headquartered outside the United 

States, what type of impact it will have on them that it does not 

have on companies that are headquartered here. 

Mr. Pompeo talked about something that was simple in terms of 

getting executives in and out. But there are also more direct hits 

in terms of government contracting, access to grants. We want a 

level playing field for these companies and, as I said, not to just 

win the investment, but ensure once they are here that they have 

every opportunity to succeed. And sometimes that discrimination is 

direct and obvious, but many times it is inadvertent. 

And what I think that this legislation and what this study can 

do is it puts investment policy front-brain. We can think about 

these things before policies are enacted so that we don’t have to go 

and patch things up afterwards in order to make it OK for a foreign company to be here. 

Mr. TERRY. Ms. Dempsey. 

Ms. DEMPSEY. Thank you. I agree a lot with my colleague on the 

FDI side, but I think we cannot lose sight as this legislation does 

not, that there are business climate issues that affect both domestic 

and foreign manufacturers. And this legislation, I think, will be important, frankly, to both. Some of these issues will be foreign investors looking at the U.S. market. But there are other issues that 

will impact, I think, manufacturing more broadly in the United 

States and are relevant. 

Mr. TERRY. Mr. Slaughter. 

Mr. SLAUGHTER. I echo the previous two comments. I would add, 

I think, one of the most immediate things the U.S. can do to improve the investment climate would be reform our tax code. On a 

lot of indicators we have one of the highest-burden tax codes in the 

world, both in terms of the statutory effect of tax rates and the 

complexity of our tax code. So I would put that at the top of the 

list. 

Mr. TERRY. Mr. Baily. 

Mr. BAILY. The three things that I hear most from companies: 

number one, that they have to spend a lot of money on training 

and skills so that they would like to see a better job. And that is, 

obviously, a state and local function to an extent. The second is 

taxes, which you have mentioned. And again, it is not that our corporate tax collects a whole a lot of revenue, but I think the complexity and the marginal tax rates are a concern. And then the 

third thing I hear is really the complexity of, sort of, permissions 

100 

and environmental rules, and it is not—a want to make clear, I 

don’t want to dismantle our environmental rules—— 

Mr. TERRY. No. 

Mr. BAILY [continuing]. But the speed of getting permissions, the 

ability to coordinate across agencies and between the federal, state, 

and local government makes for a lot of complexity and a lot of 

delay. And that is what I hear is a concern. 

Mr. TERRY. Ms. Drake. 

Ms. DRAKE. Thank you. We think one of the main things inhibiting investment here is the misperception that it is too expensive 

to invest in manufacturing in the United States. And we hear this 

from firms that have re-shored and explained that they thought it 

was going to be so much cheaper to invest and produce elsewhere. 

And when they really that looked at the numbers and the extra 

cost of producing elsewhere and shipping back to the United 

States, they found that it is a good deal and there is a good value 

here. So I would echo what Undersecretary Sanchez said about getting the word out and doing promotion. 

Mr. TERRY. OK. Ms. Dempsey—well, I tell you what. We can’t 

answer this in 50 seconds so I will put the rest of my questions in 

written form to you all. 

And at this time, I will recognize Jan Schakowsky for her questions. 

Ms. SCHAKOWSKY. Thank you. I wanted to ask Ms. Drake. A portion of your testimony is rights provided to foreign investors should 

not exceed rights of domestic investors. Can you elaborate on exactly what you mean by that? 

Ms. DRAKE. Absolutely. So a foreign investor, if the foreign investor is from a country with which the United States has an FTA, 

a Free Trade Agreement; or a BIT, a Bilateral Investment treaty, 

has certainly legal rights through the investment chapter and 

through the process guaranteed by the investment chapter, which 

is investor-state dispute settlement, to have a complaint that may 

have reduced the expected profit or somehow didn’t provide what 

the international law calls the minimum standard of treatment, 

and skipped domestic court, so skipped state courts and federal Article III constitutional courts—go to an international arbitration 

panel and pursue this challenge. And it is, in some ways, similar 

to the 5th Amendment takings challenge under the Constitution, 

but it has got a broader definition of what property is; it has got 

a broader definition of what a takings would be. 

And we hear from small domestic manufacturers that they simply can’t challenge their complaints about local, state, and federal 

regulations and laws in the same way. And they feel that all investors in the United States should have to go through the same system that respects our democratic process and democratically enacted laws and regulations. 

Ms. SCHAKOWSKY. So let me ask just a broader question then. 

How would you revise, including, I imagine, taking what you just 

said into account, that the current draft of the Global Investment 

in American Jobs Act to achieve the goals that will not only attract 

foreign investment but also look at our domestic workers. 

Ms. DRAKE. For that particular issue, we would add a provision 

that asked the Department of Commerce to really look at the FTAs 

101 

and BITs that we have made and whether the extraordinary legal 

rights given to foreign investors somehow inhibit or discourage domestic industries and make an unlevel playing field. So just with 

that addition of something to look at, we think it could be very useful. 

Ms. SCHAKOWSKY. In your testimony, Dr. Baily, you draw a distinction between greenfield investment and investment that stems 

from merger and acquisition, and I asked Secretary Sanchez about 

that, too. Do you think there would be merit in the following one: 

BEA, once again, conducting a survey that distinguishes between 

greenfield investment to having the review and report and the 

draft bill under consideration take this difference into account? 

Mr. BAILY. I would certainly like to see that additional data. I 

think it would be very helpful. So yes, I would. I do think that 

there are advantages that you can get from takeovers. There are 

obviously some takeovers you don’t want and you mentioned those 

about proprietary technology and so on. You have to be careful. But 

in many cases a company that gets taken over may have been in 

difficulty. The new company may bring in investments, and we 

have seen that in the steel industry and other places. 

So I am not against takeovers, necessarily. But I agree; it would 

be helpful to know what is what and what the data says. 

Mr. SCHAKOWSKY. There was one other section, Ms. Drake, that 

was of interest to me that had to do with a Chinese company and 

somehow our, not inability, but making it difficult for CFIUS to actually secure the information that we need to make sure that information they get from American companies isn’t used in the wrong 

way and counter to CFIUS rules. I wonder if you could talk a little 

bit about that? 

Ms. DRAKE. CFIUS actually has a very small mandate and it 

doesn’t really look at greenfield investment. It doesn’t look at 

equipment sales contracts. And so there are various ways that it 

may not be catching all of the investments or equipment purchases 

or other contracts here that could have an impact on our national 

security. So consistent with some recommendations made by the 

U.S.-China Economic and Security Commission and even the Heritage Foundation, which you won’t find me quoting a lot, we would 

recommend that that the Committee take a look at possibly expanding the mandate of CFIUS so that they can really look at all 

of their potential investments that they need to not with an eye of 

stopping FDI at all but just to make sure that we are protecting 

our national security and economic security in the way that we 

need to. 

Ms. SCHAKOWSKY. Things that have dual purpose, for example? 

Ms. DRAKE. Yes. There is an example in my written testimony 

of AVIC acquiring Nexteer and it is this steering technology that 

also has a military purpose, and that transaction has already gone 

through, but there is some question now about the technology 

being transferred to China. Will it be used for military purposes? 

And the information seems to all be in China, and there is no way, 

at this point, to really know if it will be used against the United 

States in a military way or it won’t be. 

Ms. SCHAKOWSKY. OK. I thank you for your testimony and your 

suggestions. 

102 

Mr. TERRY. Thank you. 

At this time, I recognize the vice chairman of the committee, Mr. 

Lance. 

Mr. LANCE. Thank you, Mr. Chairman. 

To Dean Slaughter, in your testimony you indicate that there are 

two worrisome trends. First, although many related to non-employment activities, U.S. employment flatlined from 2002 to 2010 and 

then dipped from 2007 to 2010. Would you elaborate briefly to us 

on that? 

Mr. SLAUGHTER. Sure. So over much of the past 10 to 20 years 

before the decade of the 2000s the presence of the U.S. affiliates 

of foreign multinational companies had grown on a lot of dimensions, employment being an important one. Employment had almost doubled over about a 15-year period. But employment has not 

been growing, and I think again from the broad policy perspective 

that, I think, many of us share of trying to have good jobs and good 

wages, one of the really important things is these global companies 

tend to have a whole nexus of productivity enhancing things of investing a lot in human resources, investing a lot in capital of new 

ideas through R&D. So those tend to be good jobs at good wages. 

And so thinking about, per the topic of this hearing, policies that 

could try to allow that employment to increase would be great. 

Mr. LANCE. And Ms. Drake, might you respond to that as well? 

I would certainly be interested in the position of your great organization. 

Ms. DRAKE. Thank you very much. The data on, for instance, the 

high wage rates paid by foreign investors is really good information. We would like to see further expansion to get down into the 

weeds on that information because foreign investment, approximately, it is—roughly 40 percent of all foreign investment is in 

manufacturing. 

Mr. LANCE. Yes. 

Ms. DRAKE. Manufacturing tends to have higher wages anyway. 

And in the U.S. economy overall, there is only about 10 percent of 

the employment is in manufacturing. So there—I think there are 

some deeper questions about whether it is really bringing wages 

up. And if it is, we should do everything that we can to promote 

it. But if we find that in certain sectors foreign investment is negatively affecting wages and benefits, we should look at that and see 

if we can do anything in a policy way to turn that around so that 

all foreign direct investment would be good for workers in bringing 

wages and benefits up. 

Mr. LANCE. What sectors in particular are you referring? 

Ms. DRAKE. Well, one particular concern is auto manufacturing. 

And there has been a trend for foreign auto manufacturers to hire 

a lot of temp workers. And there is an article from the Washington 

Post that I would like to submit for the record that talks about this 

use of temp workers. And what it has done is it makes it less competitive than for existing American auto manufacturers to not do 

the same thing. So as there are competitive forces on wages and 

we want those competitive forces to be bringing wages up rather 

than down. 

Mr. LANCE. Dean Slaughter, would you comment? 

103 

Mr. SLAUGHTER. I just echo Ms. Drake on the concern about 

measurement, but some of the best academic and policy work that 

has been done on this shows that when you control for industry, 

you control for location in the U.S. of manufacturing plants that 

are part of multinational companies, they tend to pay consistently 

about 10 to 15 percent more. And not just for the non-production 

workers but for the production workers as well. We can up measurement on these things. As always, it is really important and 

more data would be great. But there is a lot of evidence that these 

wages are high. 

Mr. LANCE. And then, Dean Slaughter, you say secondly, a worrisome trend is that the U.S. share of global FDI has fallen sharply. 

And we are working in a bipartisan way on this issue. Could you 

elaborate briefly on that aspect of your testimony? 

Mr. SLAUGHTER. Sure. I picked up on something that Dr. Baily 

said, which is I think as there is faster economic growth in China 

and India and a lot of parts the world, I think it is inevitable that 

that faster growth will bring some decline in the U.S. share of 

world FDI flows. 

Mr. LANCE. Yes. 

Mr. SLAUGHTER. But what is striking is how much more dramatic the fall in FDI shares for U.S. have been compared to our 

share of GDP or other economic measures. And so that gets to the 

need to have a policy environment that supports the growth of 

these companies here. 

Mr. LANCE. And this is a relatively new trend only in the last 

decade, your second point, and that is why we are trying to work 

through this issue in a bipartisan capacity? 

Mr. SLAUGHTER. Yes. So in the ’90s, it was the opposite. 

Mr. LANCE. And was that due to the stronger economy in our 

country in the 1990s in your judgment? 

Mr. SLAUGHTER. So that had a lot to do with it. We had a strong 

productivity boom in the second half of the 1990s and that overall 

strong growth and jobs and incomes was part of what attracted 

these companies here. 

Mr. LANCE. And might I respectfully suggest that was due to bipartisan cooperation, a Democratic president, and Republican control of the House in the late 1990s. 

Mr. POMPEO. Do it again. 

Mr. SLAUGHTER. Absolutely. 

Mr. LANCE. I hope that is possible. Thank you, Mr. Chairman. 

Mr. TERRY. Thank you, Mr. Lance. Let’s see, Mr. Long. 

Mr. LONG. I am hard to miss. What do you mean let’s see? 

Mr. TERRY. Yes, I meant get out of the way. 

Mr. LONG. OK. Thank you, Mr. Chairman. 

Ms. Drake, you just mentioned temporary workers, hiring a lot 

of temporary workers. Describe to me what a temporary worker is. 

Ms. DRAKE. A temporary worker is hired through a temp agency 

and many of them very large the United States. And the temp 

agency is then the actual employer of record, responsible for the 

wages and taxes and benefits of that worker. And they can be on 

a short-term—when these agencies started, it was your secretary 

is sick; you need a temp for the day. As this Washington Post artiVerDate Nov 24 2008 12:16 Feb 02, 2015 Jkt 037690 PO 00000 Frm 00109 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-32 CHRIS
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cle describes—and it is not just foreign employers that are doing 

that, it is an economy-wide trait—— 

Mr. LONG. What date is that? What date was that that came out? 

Ms. DRAKE. Oh, this is an older article. It is Monday, October 11, 

2004. But this is still the pattern. Temporary workers can be hired 

from anything to—— 

Mr. LONG. I think I was still in high school. 

Ms. DRAKE. That makes you younger than me. They can be hired 

for 30 days, 90 days. Some are temps for 2 years or longer in many 

places. It makes it—typically, the temps are paid less, have lower 

benefits than the permanent workers, and their goal is to someday 

be hired on as a permanent employee. 

Mr. LONG. OK. I am actually, if I decipher and tried, 4 or 5 

months older than the AFL-CIO. So we both came along in the 

same year. 

I had a constituent come to me the week before last, I believe, 

maybe 2 weeks ago. I was home and they said we are coming to 

see Roy Blunt, our Senator; we are coming to see Claire McCaskill, 

our Senator; and we are coming to see you because we want you 

to understand, Congressman, how onerous this ObamaCare, Affordable Care Act, whatever you want to call it. I don’t think 

ObamaCare is a pejorative anymore or ever was or whatever because the President calls it that. But anyway, let us call it 

ObamaCare. And they said we want you to know what this is 

doing. And I said, well, what do you mean? He said, well, we have 

53,000—this is a local employer. Obviously, they have tentacles 

across United States. They have places of business in several 

States. He said we have 53,000 employees and the best we can decide is we are going to have to take those employees and go—not 

have anyone over 30-a-hour-a-week employee. 

Is this of concern to you at the AFL-CIO that—are you hearing 

these types of things about complying with ObamaCare and how 

we are going to get it done by 2014? 

Ms. DRAKE. I don’t work in the healthcare department but from 

what I know of we are not hearing those complaints. We are concerned that those complaints are being made. We think that the 

Affordable Care Act was a bipartisan compromise. I know that 

there were a lot of Republican ideas incorporated into the bill and 

every attempt was made to make it affordable for employers, for 

workers, for the country. And we would hope that employers would 

do their best to provide the healthcare for their workers through 

the system in the ACA so that they have healthy productive workers. 

So we wouldn’t want to prejudge that it is going to be something 

that is unaffordable or is not to work. We strongly believe the opposite. 

Mr. LONG. I had you define temporary worker for me but I don’t 

think I am going to ask you to define bipartisan because we might 

have a different understanding of that if ObamaCare was a bipartisan effort. 

But I want to read from an article in the Wall Street Journal. 

It wasn’t back in 2004; it was the day before yesterday. A labor 

union representing roofers is reversing course and calling for the 

repeal of the federal healthcare law citing concerns the law’s cost 

105 

* [The information was unavailable at the time of printing.] 

for ensuring members. Organized labor was instrumental in getting 

the Affordable Care Act passed in 2010 but more recently has voice 

concerns that the law could lead members to losing their existing 

health plans, which is what my constituent told me. He said, Billy, 

we provided much better healthcare. Now, we are going to have to 

cut everyone back to a temporary status or less hours. 

The United Union of Roofers, Waterproofers, and Allied Workers 

is believed to be the first union to initially support the law and 

later call for its repeal. And on the Republican side, we have tried 

several different ways, which is debatable whether those will work 

or not. Whenever you vote 32 different ways to defund the Act and 

do away with it, and when you don’t have the White House and 

you don’t have the Senate. But now that it has gotten through the 

Supreme Court and they have ruled that it is the law of the land 

and it is coming to fruition, I am just going to ask you to be on 

guard because when you start having people that employ 53,000 

people telling these stories—and they are not uncommon. This is 

not some far out there, somebody in a tinfoil hat—I hear tapping—— 

Mr. TERRY. That is not hearing things. 

Mr. LONG [continuing]. That is dreaming these things up. So in 

all honesty, I think this is just going to compound until we find out 

that we at least need to delay implementation at the least. When 

you have roofing unions that supported the thing saying it is not 

doable. So I am not trying to pick on you but I am just—the AFLCIO, I want to see what you are hearing. And thank you all for 

your testimony here today. 

Mr. TERRY. Thank you, Mr. Long. 

Ms. Drake, you suggested an article be entered into the record. 

Was that already part of your statement that is part of the record? 

Ms. DRAKE. It was not. 

Mr. TERRY. OK. So ordered. *

Ms. DRAKE. Thank you very much. 

Mr. TERRY. At this point, the gentleman from West Virginia. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

In Ms. Schakowsky’s earlier remarks she was talking about the 

jobs in our manufacturing and how important it is for our middle 

class. And if you were here during my comments with Secretary 

Sanchez was the concern about the loss of our steel industry in 

northern West Virginia. We have, indeed, both of those were 

owned—they were foreign investments, major foreign investments. 

One of the prime reasons that we lost both of those 30,000 jobs was 

because of trade. So I am just curious. Ms. Dempsey, maybe you 

can—and Ms. Drake, you can ply into this. 

But in some consideration to try to encourage more further investment in America, how conceivable would it be, and what would 

be the effect for people considering investment if they were made 

aware that through a trade agreement or a trade settlement that 

a company is found to be coming in inappropriately putting business out? As I understand, that money, those penalties now go to 

the U.S. Treasury. What would be the message if we could put it 

in this bill or in this study to see that that money goes back to the 

106 

individual companies that are aggrieved, and not only the companies that are aggrieved but also to the employees that have lost 

their job as result of this. I think it is far more helpful to our middle class if we are helping the people that have been hurt rather 

than the Federal Government getting the largess of that. 

What would be the effect of that, do you think, if investors knew 

that their companies could be protected? 

Ms. DEMPSEY. Perhaps I can start, Congressman. Thank you. 

You know, I started my career as a trade remedy lawyer bringing 

it cases for the last U.S. fan manufacturer here in the United 

States for the U.S. steel industry in the 1990s. And these are important issues and we at the NAM take enforcement of our own 

trade laws just as importantly as we take enforcement of other 

countries’ obligations and trade agreements and everywhere else. 

The issue you raise about where the disbursement of the funds 

goes is something that had been tried in the United States and we 

lost the WTO ruling on this. It is not something that is viewed in 

the international rules as a way forward. 

I will say that I believe that the strong enforcement you generally see in the United States for our trade remedy laws—not that 

it is perfect—but the strong enforcement is something that attracts 

companies here, that they know that there is a better chance that 

they will be operating on a level playing field, that the competition 

from imports will be on a level playing field. The one issue we have 

heard the most, though, from our companies right now is an issue 

that is before the Ways and Means Committee which is if there is 

circumvention of those anti-dumping and countervailing duty orders, they take too long to get enforced. And so we support something called the Enforce Act so that those rules are enforced. 

But the issue of the payments back is a complicated one. I think 

there are other things in terms of domestic manufacturing we need 

to do to improve the opportunities for those companies, as well as 

the manufacturing community at large. 

Mr. MCKINLEY. Ms. Drake. 

Mr. BAILY. Can I make a quick comment on that? Would you give 

me 30 seconds? No, you want to talk to her. 

Mr. MCKINLEY. After her. 

Mr. BAILY. Excuse me. 

Ms. DRAKE. Thank you. I think your idea on remedies is a good 

one. And as the AFL-CIO tends to disagree with many of the strictures sent down by the WTO—so maybe that is something that can 

be addressed with WTO reform. 

To get to your earlier question to Undersecretary Sanchez about 

who can bring a case and is there adequate assistance for cases, 

we would support a broader definition that cities and communities 

could bring cases, that workers could work together with cities and 

communities and the employers to get the resources needed because these cases are very expensive. And we would support the 

Department of Commerce providing additional assistance beyond 

what they are currently doing. 

And I think one other thing with regard to your dumping concerns, with these state-owned enterprises investing and operating 

in the United States, it is possible that they are getting subsidized 

inputs, tax rebates, no-cost financing so that they can be here esVerDate Nov 24 2008 12:16 Feb 02, 2015 Jkt 037690 PO 00000 Frm 00112 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-32 CHRIS
107 

sentially producing what would be a dumped product if they made 

it in their home market, but they are producing here and our current trade remedy laws can’t reach them. 

Additionally, there has been some recent investments by Chinese 

state-owned Corporations, SinoPac, for instance, in oil investment. 

And I am not a practicing trade remedy lawyer but I spoke to some 

before this hearing and it is not clear that if they import what 

would be dumped product to themselves that our trade remedy 

laws could get at that because if it is within the same company, 

it may not enter commerce, and it may not be subject to our antidumping laws. 

So there are a lot of interesting things to look at here in order 

to make sure that competition is level and balanced and that domestic companies and domestic jobs are really strengthened rather 

than put at risk. 

Mr. MCKINLEY. Thank you. 

Mr. TERRY. I would request, respectfully, a unanimous consent 

for an additional minute so that Mr. Baily can answer. 

Mr. BAILY. Thank you so much. 

While it is clear that we need to enforce our trade laws and it 

is true that trade has been an important issue in the steel industry, with all due respect, I would say that I doubt if the loss of almost 30,000 jobs is really attributable to trade, because if you look 

at a steel plant today compared to one some years ago, now you 

see, you know, four people and some computer monitors, whereas 

before, you saw lots of people down on the production lines. It has 

become a very automated company that doesn’t hire a lot of people. 

And the second thing is, is that we have had a terrible recession 

so that the demand for steel, it really collapsed in the recession. 

It is coming back now, but I don’t think it is where was. So I think 

there are some domestic issues also associated with some of those 

jobs. 

Mr. MCKINLEY. When China is producing six times the amount 

of steel that we have, and just a few years ago we were both producing the same quantity of steel, it tells me something is going 

on in China, whether it is currency manipulation or what. 

Mr. TERRY. All right. Thank you, Mr. McKinley. 

And now, Mr. Johnson of Ohio is recognized for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Dr. Baily, before I ask my question, I am not sure—I live in steel 

country, as Mr. McKinley does. I don’t know what steel plants you 

go to where you have got four, five people running computers that 

produce steel. That is not the way it is produced along the Ohio 

River in the plants that are in my district. You have got hundreds 

and hundreds and hundreds of people that are employed in those. 

But let me get to my question. I like trade also. I believe in fair 

trade. You know, the idea of free trade to me is a vernacular that 

troubles the American people. You say the term free trade; it conjures up ideas of Chinese ships pulling up to docks and offloading 

technology and products that disadvantage of our workers back 

here at home. I have advocated for a while changing the vernacular 

to talk about export optimization agreements rather than free 

trade agreements, because that is really what we are trying to get 

to. We make it here, we innovate here, we sell it there. 

108 

So with that in mind, you recommend that the U.S. enter more 

free trade agreements. Where do we stand relative to similarly situated nations in terms of the number of trade agreements enforced? 

Mr. BAILY. I will make a quick comment and then I am going to 

defer to my friend Matt Slaughter, who can probably give you a 

much better answer than I can. Yes, to say it is only four people, 

obviously, that was a bit of an exaggeration. But productivity really 

has gone up. 

Mr. JOHNSON. Oh, I agree with that. I agree with that. 

Mr. BAILY. And you got the electric arc furnaces and so on—— 

Mr. JOHNSON. I am sorry. I have got 5 minutes so let’s go to the 

free trade questions. 

Mr. BAILY. So let me defer the answer to the free trade question 

if I may to—— 

Mr. JOHNSON. OK. 

Mr. BAILY [continuing]. Dean Slaughter. 

Mr. SLAUGHTER. So the U.S. has about 23 trade agreements enforced with other countries in the world. Many of them are older, 

many of them are—no disrespect to our trading partners—with relatively small countries for which—and you want to talk about export optimization; they are not large markets. So part of how we 

ideally get out of the world financial crisis is build more jobs and 

activity in America, link to selling things to the rest the world. I 

think there is a tremendous opportunity for the United States to 

expand the free trade access that we have to a number of other 

growing countries. 

Mr. JOHNSON. And in terms of export, increasing exports, right? 

Mr. SLAUGHTER. Absolutely. 

Mr. JOHNSON. Yes. 

Mr. SLAUGHTER. Imports have a lot of values as well but absolutely on growing exports. 

Mr. JOHNSON. We are on the same page. The administration is 

currently engaged in TPP negotiations and plans to enter negotiations with the EU this summer. Are there other glaring omissions 

other than TPP and EU in our stable of free trade agreements in 

your mind? 

Mr. SLAUGHTER. Sir, what I will add, I guess, is we can think 

about organizing not only on country lines but industry lines as 

well. 

Mr. JOHNSON. Um-hum. 

Mr. SLAUGHTER. So if we think about manufacturing deftly managed through United States, but we have a lot of large and growing 

industries and services for which there is a lot of barriers in trade 

and investment around the world. So as a complement to think 

about negotiating with countries, I think there is great value in 

thinking about finding industries in which a lot of Americans work 

throughout a lot of districts where we could open up foreign markets. 

Mr. JOHNSON. Sure. Dr. Baily, you also testified that we should 

take advantage of the natural gas energy boom, and I certainly 

agree with that. Much of that steel manufacturing that I talked 

about in eastern and southeastern Ohio is a result of that. If production were to slow or to be stopped altogether in oil and natural 

109 

gas, in your opinion, how would that impact our ability to attract 

or retain FDI? 

Mr. BAILY. It feels a little like a leading question but I think 

there is no question as to the answer, which is that if it were—— 

Mr. JOHNSON. She mentioned lawyers earlier. A lawyer doesn’t 

ask a question they already don’t know the answer to, right? 

Mr. BAILY. But it certainly would make the U.S. less attractive 

for investment for both domestic companies and foreign companies. 

Mr. JOHNSON. Great. Great. What do you think, as it relates to 

trade, as it relates to manufacturing, if you could name three 

things that we should do to bring manufacturing back here to 

America—I met with a bunch of labor folks this morning that are 

concerned about their jobs being outsourced. If there were anything 

that we could do, two or three, what would be the top three things 

that you would recommend we do to improve our position where 

our trade is concerned and retain manufacturing? 

Mr. BAILY. Well, Chairman Terry asked us a somewhat similar 

question and I think I give the same answer here. I think we do 

need to do more to make sure we have the skills in the production 

workers. We have the finest universities in the world, but many 

particularly of our young men are not going to—— 

Mr. JOHNSON. So workforce development? 

Mr. BAILY. Workforce development. Number two is harmonizing 

our corporate tax with the rest of the world so that it is less complex and the marginal rate is lower. 

Mr. JOHNSON. We are on board. 

Mr. BAILY. And then the third is around—as I said, I am strongly in favor of our environmental standards; we need those. And I 

am concerned about global warming but we need to make sure that 

you can get permissions and there is coordination between States 

and the Federal Government and among federal agencies and that 

that process can move more quickly. 

Mr. JOHNSON. Thank you, Dr. Baily. 

Mr. Chairman, thank you for the time. 

Mr. TERRY. Thank you, Mr. Johnson. 

And that concludes the members from asking questions. No one 

is left. 

So I want to thank all of our panelists for your incredible testimony and help today. It really has been a great assistance to us. 

You gave us more to think about including, Ms. Drake, where I 

think you turned around a few conceptions. We were under the impression that we should be exempting from any consideration of 

labor laws, and I think you are suggesting that we need to have 

that discussion in this. So we will have to vet through that, which 

means we also have the opportunity to submit written questions to 

you, which my members will have only 10 days to get to you. 

So that is my admonition to my colleagues is they have 10 days 

to get their questions put together. We would appreciate a quick 

turnaround in your answers for those questions. 

And at that, that concludes this hearing. 

[Whereupon, at 11:27 a.m., the subcommittee was adjourned.] 

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